Tim Wu: Why the Courts Will Have to Save Net Neutrality

By Tim Wu

Nov. 22, 2017

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Back in 2005, a small phone company based in North Carolina named Madison River began preventing its subscribers from making phone calls using the internet application Vonage. As Vonage was a competitor in the phone call market, Madison River’s action was obviously anticompetitive. Consumers complained, and the Federal Communications Commission, under Michael Powell, its Republican-appointed chairman, promptly fined the company and forced it to stop blocking Vonage.

That was the moment when “net neutrality” rules went from a mere academic proposal to a part of the United States legal order. On that foundation — an open internet, with no blocking — much of our current internet ecosystem was built.

On Tuesday, the F.C.C. chairman, Ajit Pai, announced plans to eliminate even the most basic net neutrality protections — including the ban on blocking — replacing them with a “transparency” regime enforced by the Federal Trade Commission. “Transparency,” of course, is a euphemism for “doing nothing.” Companies like Madison River, it seems, will soon be able to block internet calls so long as they disclose the blocking (presumably in fine print). Indeed, a broadband carrier like AT&T, if it wanted, might even practice internet censorship akin to that of the Chinese state, blocking its critics and promoting its own agenda.

Allowing such censorship is anathema to the internet’s (and America’s) founding spirit. And by going this far, the F.C.C. may also have overplayed its legal hand. So drastic is the reversal of policy (if, as expected, the commission approves Mr. Pai’s proposal next month), and so weak is the evidence to support the change, that it seems destined to be struck down in court.

The problem for Mr. Pai is that government agencies are not free to abruptly reverse longstanding rules on which many have relied without a good reason, such as a change in factual circumstances. A mere change in F.C.C. ideology isn’t enough. As the Supreme Court has said, a federal agency must “examine the relevant data and articulate a satisfactory explanation for its action.” Given that net neutrality rules have been a huge success by most measures, the justification for killing them would have to be very strong.

It isn’t. In fact, it’s very weak. From what we know so far, Mr. Pai’s rationale for eliminating the rules is that cable and phone companies, despite years of healthy profit, need to earn even more money than they already do — that is, that the current rates of return do not yield adequate investment incentives. More specifically, Mr. Pai claims that industry investments have gone down since 2015, the year the Obama administration last strengthened the net neutrality rules.

Setting aside whether industry investments should be the dominant measure of success in internet policy (what about improved access for students? or the emergence of innovations like streaming TV?), Mr. Pai is not examining the facts: Securities and Exchange Commission filings reveal an increase in internet investments since 2015, as the internet advocacy group Free Press has demonstrated.

But Mr. Pai faces a more serious legal problem. Because he is killing net neutrality outright, not merely weakening it, he will have to explain to a court not just the shift from 2015 but also his reasoning for destroying the basic bans on blocking and throttling, which have been in effect since 2005 and have been relied on extensively by the entire internet ecosystem.

This will be a difficult task. What has changed since 2004 that now makes the blocking or throttling of competitors not a problem? The evidence points strongly in the opposite direction: There is a long history of anticompetitive throttling and blocking — often concealed — that the F.C.C. has had to stop to preserve the health of the internet economy. Examples include AT&T’s efforts to keep Skype off iPhones and the blocking of Google Wallet by Verizon. Services like Skype and Netflix would have met an early death without basic net neutrality protections. Mr. Pai needs to explain why we no longer have to worry about this sort of threat — and “You can trust your cable company” will not suffice.

Moreover, the F.C.C. is acting contrary to public sentiment, which may embolden the judiciary to oppose Mr. Pai. Telecommunications policy does not always attract public attention, but net neutrality does, and polls indicate that 76 percent of Americans support it. The F.C.C., in short, is on the wrong side of the democratic majority.

In our times, the judiciary has increasingly become a majoritarian force. It alone, it seems, can prevent narrow, self-interested factions from getting the government to serve unseemly and even shameful ends. And so it falls to the judiciary to stop this latest travesty.

Tim Wu is a law professor at Columbia, the author of “The Attention Merchants: The Epic Struggle to Get Inside Our Heads” and a contributing opinion writer.